tv Squawk Box CNBC May 15, 2012 6:00am-9:00am EDT
mandy drury. home depot expected to report quarterly results within minutes. we'll get you those mums in just a moment, but in the meantime, let's bring you up to speed on this morning's top stories. jamie dimon will be facing a grilling from shareholders at the company's am meeting today. gathering costs just days after the bank disclosed it lost at least $2 billion in that failed hedging strategy. among the shareholder proposals, one for separating the roles of chairman and ceo. our own mary thompson is at the meeting in florida and she's going to join us with a live report there at 8:00 a.m. also facebook hiking its ipo range. cnbc kate kelly reports the company expected to refile with the new numbers today. the range value is the company between now 92 billion and $103
billion and of course we'll talk more about facebook with our kayla tausche in just a few minutes. >> home depot coming in this morning and looking at a first quarter number of 68 cents a sha share. estimate 65 cents. a full year forecast for 2012 of $2.90. 17.8 billion versus 17.96 billion estimate. so a little light on sales. quarterly comp sales for u.s. stores was a positive 6.1% in the period. the company as far as a forecast for 2012 sees it up about 4.6% a chance to look at it, 48.88.
so backing off a little bit on these numbers. >> home depot had really just been on a roll. just looking if i have an estimate for the full year. looks like 292 for the entire year and they said 290. so more or less is in line with expectations. hey, manky. >> hey will. good morning, everybody. good morning, andrew. let's get to the global market stories. greece's president will ask politicians to stand aside and that a government of technocrats, but leftists have already rejected the proposal and look to force a new election believing they can win.
athens would avoid depaul on the first issue to expire after the biggest sovereign debt swap will this history. eurozone did avoid recession narrowly. new gdp figures out this morning show a strength in germany helping offset weakness in france and italy. mean i'm moody's downgrading italian banks. the outlook remains negative. we'll get more from kelly evans in london, but in asia, china reporting porn direct investment in-flows fell in the first four months of the year. this is the longest period of declining in-lows since the depthses of the global financial crisis. back here in the united states, a numb key economic reports. 8:30, retail sales, cp about i
and empire say the survey and then later the home builders survey and business inventory. so lots of things lined up for us. a flurry of economic data coming our way today. >> let's look at early stocks to watch. the company reported earnings at two cents a share. revenue beat the streets. >> even before the announcement after the market closed. >> said it controlled marketing spendi spending. we'll talk to an analyst. and agrent results topped consensus. orders rose 8%. and check out millennial media. first quarterly results as a public company, a five cent per share loss was in line with
estimates, but revenue spell short. and one more name to watch, smaller market cap, but a mover. the company says it will offer 10 million shares of its common stock to help will raise funds for the deals. basos was there last night. >> did you speak to him? >> i did. he's not mad that we play that. but i did tell him, out of all the internet ceos, is he not one of the greatest? sd . >> we're giving him free publicity. >> my wife was next to me and she didn't see that he was sitting at the table right here. she heard the laugh during dinner and she looked over and she said that is -- and i said, yes. and i went over and talked to
him, his brother was there. there are in line -- i don't know. big fan of the show. he's not mad. and he said he will -- he's working on execution at that place. you've seen how overtime they spend money when people don't want him to spend money and it all pays off. but then analysts get mad again. all seems to pay off for him. and i told him my best buy story and he loved to hear that. you end up buying it on amazon anyway like you. >> i use it as a lending library. >> obviously for someone like me who is useless in the tech department, you sfepd a lot of money. it's a premium service. >> your job, that's bad.
howard schultz, spoke to him. the entrepreneurs were amazing. saw alan from guggenheim. mar that. >> lloyd? >> spoke to lloyd. majority leader. cantor was there. >> how were you you feeling? >> sweating a bit. didn't get much sleep. >> i didn't get much sleep either. i was working. mandy whether carry the show today. >> i was in bed nice and early. >> they raised millions. i don't know the total from last night. last year was $47 million. brian williams is incredible as always. seth meyers was funny. >> give me the best one liner of the night.
>> jeff bezos' laugh. >> i think it was probably seth meyers talking about people that paid a lot of money for the table has were basically closer to westchester. and that -- >> you can't beat that as a one liner. >> something about rihanna that -- she was about this big from -- i mean, it is a huge -- he was at table 2034. and he was talking about how it's every comedian's dream. you want to get that apply a monday might. >> and the problem is by the time they bring on the act right at the end, everybody's like, well, i have to get up for squawk box and they're walking out the door. because they get top class acts. stevie wonder, rihanna. >> one of the co-chair men steve burke was there with his lovely wife. also eli manning was also there and he spoke. eli is -- >> do you think they're all sitting around the breakfast
table and saying i saw joe? >> yeah, saw concekernen. they're saying where is sorkin. because there was a big empty seat. >> i was writing a column. >> i think we have to go to the global markets report. kellry he ha ry evans, hearing the stuff she's missing out on. you can go on the big ferris whe wheel, right? you have some things to do. the tower of london is pretty cool. >> i'll take two any lmillenniu history for the robinhood. >> we're very charitable over here. they're just trying to help themselves. any way, what's going on? >> we've actually got a little bit better day on the market. fortunately for you you guys here, yesterday was such an ugly day, but if you take behind me, stoxx 600, advancers outpacing the decliners by a 6:4 ratio.
not the strongest move, but it was the german gdp figures that helped to spur a little bit of a rally this morning. as you can see, we've pulled back a little bit, up about 0.2%. take a closer look at some of the indices. ftse mib an increase given what the weak growth figures there. paris, the cac up almost 0.9%. xetra dax 0.4% and the ftse 100 about will almost 0.3%. let's take a closer look at the big story. it's european banks. you can take a look at some of the banks in italy which were downgraded by moody's last night. the rebound suggesting that move was pretty much priced in. it also could have more to do with the broad -- this feeling of risk coming a little bit back in to the market today.
if you look at what's going on in italy, seeing yields about 5.85%. german bunds 1.498%. and the question will be what do hollande and merkel say to each other. and will he be speaking in german to merkel herself. guys. >> say it again. >> she said hollande. she's not saying it like you. i mean, it look like it hurts to you say that. >> i was on the show last week and we had exactly the same conversation. it was ground hog day. >> it is. >> every single morning is groundhog day. >> i should apologize to andrew for insulting his eyes and i wanted to offer my own weird eye thing and that is that i am only wearing one contact because i
have one really bad eye. so you can a that mental image as -- you you can hold that one. >> do you wear different colors just to freak people out? some days wear like a blue, sometimes a green, sometimes purple or even a pure black one? how cool would that be. >> you yeah, i should do to match the heat map frankly. i'm sure it won't be long before there will be technology that allows me to do that. >> kelly -- she's been thinking about the insult. that's nice. >> i felt very bad about that. >> we're getting-will- >> we all loved it. but never behind. >> let's get back to the news. and back to facebook. kayla tausche joins us onset. talking about the ipo and the range changing going up, up. >> yeah, so on friday, we actually reported on c mbs that this was likely to happen. we're still expecting to be filed today. and i think that this new range, $34 to $38 is share, it's good. but it's a very controlled raise from every single angle that you look at it.
so the range that he had before was $28 to $35 a share. that would have given and you valuation of 77 to up to $97 billion. and the new range has a valuation $92 billion to $103 billion. sort of what we've been expecting all along. now pushing it up just a little bit as we're going into -- >> is that going to make it the biggest ipo in u.s. history? >> no the biggest u.s. internet ipo. i want to say veisa was the biggest. >> the biggest internet ipo? >> we're using internet. it is biggest than google. >> what's the new height? what's the top number? >> i think it's around 19 billion. >> it's his birthday this week. >> that's true.
i believe his girlfriend was getting her doctorate and that's how he was celebrating. >> what does she get for a doctor rat? if you were mark, you you -- >> you might get a present after your boyfriend is worth $19 billion. >> you would hope so. >> he has to spend at least more than the $140 -- >> the trade has to go out without a hitch first. closing the book today. they have about two hours to build it, make sure all the cornerstone investors are in there at the right price and have committed to being long only investors here. if they price at the high end, they would take home about half of that because that's what the new shares offering is. because we've been arguing a lot about demand.
a lot of conflicting media reports. about you expect to be 50 times oversubscribed and it's only 30 times, yeah, you could say weaker than expected. >> and it's like the deal of the century. it makes me almost feel a little bit skeptical about how it would go off. i tweeted we'll be on "squawk box" and talking about facebook. and some people replied, no, please, no more facebook. it's almost like we're just being bombarded with facebook right now. >> and a lot of times when you see he's deals raise hair price range, let's say it's $18 to $20, normally you see that range go above the high he said of the previous range. so your new range would be $20 to $22. the fact that they are not going above $35 for the low end of the range tells me that demand is high, but it's not blockbuster. they're still being cautious in keeping the low end of the range inside that bracket still. >> they're not getting married,
are they? >> i don't know. i'm a reporter, not a spy. >> probably wants to get the ring on the finger real soon. >> they've been together for quite some time. >> do you think that's dumb for him? >> i don't know whether -- he's not marrying her yet. >> they've been together for a long time. >> does she wear a matching w hoodie? >> are you going to wear a hoodie? >> stay tuned. no, i'm not going to wear a hoodie. i can't even keep a straight face. >> something's in the works here. but we'll talk more about facebook at 7:00 a.m. with jeff glass. >> and we also have a very interesting survey, the associated press carried out a poll, we surveyed more than 1,000 people. their thoughts about facebook, do they trust mark zuckerberg, do they think he's fit to run a company of this size. do you think it's overvalued.
do you think something new could come along. we have all those answers. >> a lot of questions and answers. >> i think joe is taking a nap. he's tired. >> i am tired. kayla was there last night. you brought up one of the good line has brian had with seth meyers. he wanted to co-anchor the "nightly news" and brian said you're good at what you do -- >> he said stick with what you do. a few minutes late at night once a week and then there's "saturday night live," also. >> and she told it really well. >> she did. coming up, home depot, a three cent gain in that 68 cent number. so the 65 cents was in line with expectations and revenue was a little bit light and question about guidance and the street reaction so far, we've got the dow still called higher. but home depot, which has been on a roll might not be leading the dow higher. first a bit of sports news.
raunkse e raepger ee erangers beat the de. providing the "squawk box" staff the new jersey devils responded to our tweet yesterday that they would send in the devils mascot. and they did. the rangers don't have a mascot and they didn't even respond. >> fantastic. >> how are you? >> nice to see you. come on in. no, don't take me with you. all right, you're not going to take my soul, are you? [ wind howling ]
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welcome back. it looks like the futures are pointed to a higher open. mi making headlines, coty withdrawing its bid for avon. says the world's largest cosmetics direct seller missed a deadline to start discussing a deal first proposed back in march. >> 10% off and they did not believe -- avon did not -- they miscalculated. they did not believe coty would go away like this. >> any other potential contender that could come in here? >> no. >> when you knew it was
involving warren and trot, why wouldn't this they believe that? would he suddenly turn hostile? >>. >> they had to get price higher. >> they knew it would have to be friendly to go forward. so if they continue to resist, he was going to drop it, right? >> but i think in this case, they called the bluff and they called it too early. >> this to me could be like a yahoo! situation. this could hang over avon for a very long time. >> is there anyone really to at that time blamtake the blame? i guess the board. they're between ceos. >> and the board wants -- i don't know. this one i do not get. >> you really don't. >> i would at least engage in some form of conversation and then maybe walk away if i really
hated them that much. but it seems nutso. >> all the people now in europe recently in the last week have started to sort of go back on how disastrous it would be if someone were to leave. but then now i read what might happen, it looks lehman like times ten almost. in terms of spain and italy. because all of a sudden you question all sovereign debt. >> bond yields spiking, immediately people start tash getting w arrest g targeting who is next. >> all the business deals done, all of help become suspect, not just the sovereign debt. and then you start worrying about the business deals in some of the other countries and then you worry about depositors at the spanish and italian banks. and then if the banks can't support the sovereign debt of the spanish, it just seems
like -- >> seems like a crisis of confidence. lehman was a big company obviously, but we're talking about countries now. countries i've heard of. spain, you know. been to all the islands. bring it back home. squawk news line with specs on home depot, managing director, is there something more disturbing here, lawyer remarks the outlook or the revenue number in the current quarter? what has the market participants a little bit negative? >> home depot up 19% year to indica date and i think a lot of people expected a bigger up side in the quarter and for the full year guidance. revenues were up 6%.
we were looking for five officially, but with perfect weather that you would expect more than this. full year guidance is baefrkly where the street already is after seeing the first quarter. earnings have a three creent benefit, so 65 cents is just in line. i think everyone was expected more up side here. >> i have a chart up just going back -- is that only a year? it's staggering. it was $36. so it finally made that move back to the late 90s where it had that premium. i'm not sure where it was trading at 40 times earnings, but we finally got back there. is it justified that it's up in the high 40s how and you expect to resume an upward climb or is this a set back? >> so our price target is $45. and i think that's likely near term. just as people got too excited about home related spending improving, this is a little
underwhelming. >> so you have a neutral on it? you should have a sell on it. >> i'm not sure that's enough down side to expect a sell. we are closer to the bottom in the cycle than the top. >> how do you feel about its competitor, lowes, how would you compare the two if you had to put help side by side in terms of rep days for an icommendatio investment? >> we prefer home depot. they've made big improvements in merchandising and distribution. i can't say the same for lowes p lowes is playing catch up and we don't expect lowes to have same store sales up as much as home depot. so on a relative basis, this is bad news for home depot, but probably worse for lowes. >> all right, lawyer remark thankthanks for coming up. >> coming up, at least one of these things is not like the other one. president obama, jamie dimon and the ladies of "the view." [ female announcer ] it's time for the annual shareholders meeting.
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morning. welcome back to "squawk box." i have a gift for you. yeah, i got this for you you. will you you put that on? that's a big stick you got there, fellow. that was the rangers -- wow. this is a good rivalry. we're in new jersey, too, so i understand you're a little bit unhappy that i did that. nice. >> at least it's under his arms.
this is a family chlt v station. he could it done is t. somewhere else. and we were chatting during the break remember seinfeld and elaine's boyfriend, putty. >> how does he feel about this? >> yeah, it was a bad night. it's okay. he's an upper west sider. i'm joe kernen. andrew ross sorkin and mandy drury are both here. you'll be on assignment. >> i'm going to -- going to be on assignment. >> becky on assignment. >> is that a euphemism for lying on a beach somewhere? >> no. >> getting surgery or something? he left. >> he left? did we upset him? >> i don't know. >> i think we upset him.
he speaks in tongue. >> he's chucking his stick. is he going to be throwing phones around the desk and breaking things? now he's sad. >> u.s. equity futures at this hour are indicated up about 60 points on the dow jones. after a rough week last week. rough week the week before that. and then a rough day yesterday. europe doing a little better today, as well. not sure why. >> i was trying to work all that out, as well. because you have, what, like 0% growth for euro gdp. italy contracting more than expected. france growth evaporating. but germany was stronger than expected. and i'm wondering whether that was the linchpin.
>>. >> and the stronger dollar is not coming necessarily because of -- >> we have a fight going on here. >> this is tv, live tv. boys, take it out the back. >> i've been wanting to do that for a while. that's nice. yeah, this is getting -- >> getting ugly. >> you have to read that, andrew. because the dollar has been going up. >> 11 for 11 yesterday. >> least ugly. >> tallest person in the room full of -- can't really say that either. >> let's get to -- >> if the u.s. dollar is up again today, it would be a 12 day record winning streak. >> i'm only going to get in trouble with the devil in a second, but the other talker of the morning let's get to it,
jpmorgan. president obama says the huge trading loss at the bank illustrating the need for more wall street bank reform. he talked to the ladies of abc "the view" about it in an interview taped yesterday that airs today. take a listen. >> even if you're smart, you can make mistakes. and sinces the these banks are ensured, backed up by taxpayers, we don't want you taking risks where eventually we might end up having to bail you out again. because we've done that. been will. didn't like it. this is why we raised capital requirements so that when they do lose money, they've got enough money socked away that they can pay off those obligations. this is why we've put in place something called the covolcker that says if you're a federally insured support eed bank, you c
nt not make trades with your own money. >> it's getting political. in other new, shares of groupon are jumping after the company reported quarterly results after the market closed yesterday. ken santo joins us morning. ken, good it on sto see you. i can't hear you if you can -- now i can hear him. >> he just wasn't responding to you. >> could have done a verizon commercial. can you hear me now. so here's the question. they came in in line. they beat a little bit. is this a good story or is this just they didn't totally screw it up story? >> a little bit of both. a little that expectation was certainly low going into the quarter. but i think when you look at the acceleration in mort america, it caught a lot of people by surprise. and that's where they're really rolling out a lot of their new technology initiatives around personalization. that's where you have groupon now and mobile and some of the rewards offerings. so i'd say a little bit of both.
>> they clearly controlled the spending in terms of the marketing. is that something that can hold up or were they able to control for a quarter or next quarter we'd have to see them spend more? >> part of groupon's story was a race to scale, so a lot of list acquisitions trying to acquire customers. now they've reached that critical mass so a lot of spending is shifting out and going into optimization of search and sorry platforms. so i think that spending is actually -- they're able to show that they can bring on customers more efficiently. >> i see post earnings you hiked the price target to 17 bucks from 15 with an overweight, but everyone at 17, that's lee bucks bl below its ipo price. do you see any possibility it will get back to on even its ipo price? >> when the ipo part of the story was mobile and the belief that they could transition their platform in the current scale that they have with the daily
deals into a highway local offering, i think there was patience that was lost when they started to report issues around a county and you you saw some deceleration in growth. when the stock hit $10, we upgraded our rate to go an overweight because it was essentially trading in line with where google had reportedly offered the $6 billion close to two years ago. so at $15, yes, it's still below the ipo price. we increased our target to $17. so it still has a ways to go, but what was encouraging about this quarter is that the north america revenues where they actually do have -- they're further along on the mobile front, that you are starting to see some signs of traction there. >> ken, thanks for joining us. i feel like i may have gotten this one wrong. i don't know. i was very down, very negative on this early on. i thought i was right. now maybe it's coming back. >> you ook it took it in the te
hockey player. it was really not doing well at all. anyway -- >> better than the zweater, but not good. >> not good? >> it's to taunt my man over there. >> okay. we'll get a word out of him before the end he have the day is up. satan, you're going to talk. comments, question, anything you see here on, e-mail us and also tweet us. we're all on twitter. coming up, the new jersey devil needs his team to win for him to keep working. first here's a look at yesterday's winners and losers. it it's very important to understand
how math and science kind of makes the world work. in high school, i had a physics teacher by the name of mr. davies. he made physics more than theoretical, he made it real for me. we built a guitar, we did things with electronics and mother boards. that's where the interest in engineering came from. so now, as an engineer, i have a career that speaks to that passion. thank you, mr. davies.
unemployed continues to wreak havoc on the market. the new normal is a place i don't want to be, kevin. hopefully it's not structural at this point. but it's just hard to see now that we're back hoping for 160,000 or 170,000, that's not must have to bring down the radar. are we a high 7, low 8 country?
>> i don't think that's a permanent plight, but we have a problem that we've not really had before. there are 5 million people that have been unemployed for so long that it's really hard to connect them to the workforce. you see hose jobs being created very often it's folks who just lost their job that are being retired, but the people who have been unemployed for a long time have a lard time getting reconnected. dean baker and i just wrote a report about this, we talked it about it in the "new york times." and if you're over 60 and you've been unemployed for more than a year, our only looking at something like a 6% chance of getting hired in the last three months. >> and are we kind of -- lulled in a false sense of security that we've come down a full point or so when much of that has been people just throwing in the towel, but politicians still use it as a signal of progress on the jobs front. but should we be thinking we're at 10% really?
>> if you look at job creation, the net number is the difference between job creation and job destruction. the only reason we're creating jobs each month is nobody is quitting. butt reason why nobody is quitting is that they're so depressed they think if i quit, i'll never find a job so they're holding on to the job they have. but requenot a great labor mark all. >> how much of the problem is related to the housing market some because obviously if you don't have mobility to be able to pick up, sell your house and move to a different state to take a job offer, you're in a really bad situation. a lot of people feel they really cannot leave their houses because they won't get any money for it. >> you you hit will tyou hit th held. there's a study that showed in countries where people can't sell their house very easily, then they tend to have much higher unemployment rates
because people get stuck in the bad market because they can't get out from under their home. >> so we need to wait for the housing market to recover because the jobs market recovers? >> especially second earners will be stuck in their home and can't move to a better market, that's right. >> what do you mean your colleague -- dean is not an aei guy. >> no, but he's an old friend. and the fact is -- >> that's nice. what do you agree on? >> we agree there's a national emergency, that there are all these people separated from the job market and they're drifting away and everybody is so busy with their partisan arguing that they're ignoring the big problem that we have the long term employed that are hard on connect to the labor force. so we agree that everybody has to talk about. but then on measures to address
it, eugene and i pushed a while ago the work sharing idea where you change the unemployment insurance so it doesn't subsidize people to be unemployed for 99 weeks and basically have an almost impossible time getting reconnected to the work portion. instead what we can do is encourage people to stay on the job by allowing employers cut hours and wages and have it filled back in with ununemployment insurance so people don't have to leave the labor force in order to get a little help from the government. and in germany, the unemployment rate is about what it was at the start of the recession and gdp growth is worse than ours. >> almost makes sense. it will never happen here. >> no, it did happen here. just a few months ago, congress passed a law that expanded radically our work sharing programs. it's a little late, but it will help a little. >> how many people will it affect? >> it depends on the states because the states run the programs. but what the federal government is doing is basically saying if you expand work sharing a lot, then the feds will peick up the
tab. >> thank you. appreciate. good to see you. still to come, one of the most connected men in the world of american business, staples founder tom stemberg, why he credits mitt romney for his success. but first, we attended the robin hood found days's event in new york last might. actually joe did. price of admission $3,000. raised more than $57 million for charity. among the names in attendanc attendancattendance -- take a listen. >> just want to make sure everybody is as generous as they can be because pofrly levels in new york have reached record highs and the prosperity is not being spread enough across the whole city. so it's really important for everyone to give back. >> i think it's great for new york because we all get together and raise just a huge amount of money to take care of people in new york who could use the help.
so we're really excited about it. should be a great night. [ nadine ] buzzzz, bzzzz, bzzzz, bzzzz, you know, typical alarm clock. i am so glad to get rid of it. just to be able to wake up in the morning on your own. that's a big accomplishment to me. i don't know how much money i need. but i know that whatever i have that's what i'm going to live within. ♪ ♪ [ male announcer ] we began with the rx. ♪ then we turned the page, creating the rx hybrid. ♪ now we've turned the page again with the all-new rx f sport. ♪ this is the next chapter for the rx. this is the next chapter for lexus.
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all right. we are in chairs. we've got our friend here in the new jersey -- how you doing? good to see you. he's not going to talk because this doesn't really -- oh, i'm sorry. it hard for him to talk because your mouth really doesn't move. >> we're going to get a word or two out of him by the end of the session. >> would a hockey guy ever sit like -- >> yeah, come on. scratch yourself, do something, man. >> but he's a ranger. >> he's an upper west sider. you have to excuse him. >> it was not a great 3-0 -- it's a long series. a couple more things about robinho
robinhood. paul jones gave an impassioned speech. i talked to mel, told him how much i could live without sirius xm. what was interesting is they have testimonials from the people the charity helps and then the people are there and some of the success stories, one guy had to move his family to a homeless shelter, now he's got a job as a bus driver. it's the biggest one-night take. jeff zucker is working on a show can katie, as we know. >> mr. brokaw. >> yeah, mr. brokaw was there. it's good work. you see a lot of hedge fund people. as much as occupy wall street may cast a disparaging eye on wall street, they're very
philanthropic. you would miss that, andrew, if there was no wall street. >> i agree with you 100%. >> you do. yet you didn't take the time to show up at the actual event last week. >> he was working. >> i was writing. >> lloyd says he's going to come on. next week. then i said you're on the show and now he said he's not going to come on. >> no. i'll call lloyd during the break. i'll have him back. >> i'm outing him because he did say a "come on." we'll s i'll follow up next week. >> this is a depressing article. >> college education. >> some of them are paying for 25 years after college, right? >> there's got to be a better way. >> there's something new about
students, states, municipalities. it feels as if the headlines have been crushed under the debt. when i went to school in australia, i paid for my undergrad. >> he thinks he's amazing. >> you think all you do to get this job is to put on a costume. you see how he feels -- >> he's acting. this is improv. he's working it under there. i think we've got a full thinker. >> you could look like you're dating almost. >> it was no planned, it was not planned. hello there, mr. satan. is it hot in here or is it me? >> we left our desk for ament and look who showed up.
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but is the stock a buy? >> and time to face the music. >> can you believe this? you're fired. >> the billionaire real estate mogul donald trump sounds off on another installment of "trump tuesday." >> plus a checkup of what traders are watching ahead of today's first transaction. we're keeping you ahead of the game as the second hour of "squawk box" starts right now. ♪ ♪ do the wall street shuffle >> good morning. welcome to "squawk box" on this tuesday this morning. becky's on assignment for the remainder of the week. here are your morning headlines. jpmorgan chase ceo jamie dimon will be facing shareholders at the company's annual meetings. they'll undoubtedly have plenty of questions about the $2
billion trading loss announced last week. and home depot earning 65 cents a share first quarter, matches wall street estimates. sales were a little short of expectations but the company did raise its earnings forecast. and rebecca brooks has been charged with the phone scandal. the dow would be up 50 points, s&p 500 would also be looking up with green arrows. >> it would be nice to bounce off those three-month closing lows. facebook confirming this morning it has raised the price range who are its upcoming ipo from $34 to $38 per share. it's also a bit more cautious regarding its acquisition of
insti instagr instagram. the public remains much more leery about the company's management, growth prospects and its valuation. kayla tausche is here with main street's perspective with all things facebook. >> we went back to the drawing board and found agricultural bank of china is the biggest ipo ever, raised $21.2 billion? 2010. as for facebook, let's start with the $103 billion question, will facebook be a good investment? and the public's answer in this poll is maybe. 51% said buying facebook stock would be a good investment but when you go to active investors, those numbers do get a little bit better, jumping to 62% of those who think that it would be a good investment but only 3% said that at $100 billion the company is undervalued. 50% saying that valuation is too
high. the public is also not sure if the company can continue to be successful. 43% say, sure, it will be. but 46% say it's going to fade away as new technologies come along. we're hearing a lot about myspace from the critics in the room. where does that uncertainty come from in this case? it all starts with the man in charge, mark zuckerberg. only 18% are extremely confident in his ability to run a large publicly traded company like facebook. and then there are the trust issues, nearly 60% say they have little or no trust in keeping personal information private. that's how they make money. and more than half of the respondents say they wouldn't feel safe using facebook as an
e-commerce platform. and finally, a lack of ad interest. 83% of users, i'm in that boat as well, saying they hardly or never click on sponsored content. that is the engine of facebook's profit. that makes up 82% of facebook's profit. it has its work cut out for them at least in terms of john q. public. think about it. some do think it lab good investment. >> it's going to work. initially, right? but all the things you just said -- when you spoke to me, kayla, about i don't click on those things and i've never clicked on one that convinced me to do something with my credit card ever. so does that work? have you done that? have you clicked on an ad that
says that speaks to me and then made a transaction based on that? >> i haven't. >> i don't know if i've made a transaction based on directly but i've gone on and bought things and researched things through the ads. >> i'm sure many people do. >> i told you i feel like i personally keep amazon in business. >> i'm sure many people are getting facebook fatigue, people who are saying i don't even check facebook anymore. you might as well close down my account. people are moving on to the next thing, whatever that may be. >> you're really saying horrible things. >> i'm not saying horrible things. >> on the day it's coming out. then continue this discussion with an entrepreneur turned guest host, tom.
>> do you have facebook? >> i do have facebook. what part are you buying? >> $82 million. >> think of every word to xerox to fedex to facebook. you've wanted to own those during the growth stage and this is no exception. >> how long are you locked in for? >> normal lockup, you bought from the insider, you bought it to the lockup it was subject to. >> you think it going to be a good long-term play? >> i do. i just met the woman who is in charge of selling their platform. these 33 years old, she so
bright, she's beautiful. >> steve jobs, he was very successful. >> steve jobs was strange, too, when he was 27. i wouldn't jump to those conclusions. my son went to college with zuck. he's a talented individual who has been smart enough to bring in people like sheryl sandberg -- >> there are eventually going to be threats, that's the way history goes. in the meantime you think he'll stay ahead of the game? >> i don't know him personally. based on everything i've seen, he'll be fine. >> is the pure number of facebook users the barrier to entry for anybody else? >> if all your friends are or facebook, you're not going to go somewhere else.
>> i always think of myspace. can you tell us why that fell out of favor so quickly. >> it fell out of favor because it didn't keep up, it wasn't an innovator. i don't think myspace was a true platform. i think facebook is at a different stage. >> the question is whether it's across generations. >> europe is getting on this now and facebooking their cousins in north america. i think it's going to grow globally. i'd be surprised if it's not around a decade from now. >> we're at decade valuations. that's the thing. i guess that's okay when it grows that quickly. >> depend what is kind of growth
they have, what kind of revenue they're able to achieve through advertising. 900 million users, that's pretty powerful. >> did you question the instagram purchase in terms of the cost and this was kind of like zuck saying i'm going to do this. >> if you watch these ent net companies, whether it's amazon or facebook, any time somebody came along to be a threat to amazon, whether it was zappo's, they went out and bought them. >> what else do they need to buy to take the competitors out of it? >> i don't know what ones. >> all right, stemberg. you're a romney guy. this is a great piece.
you got to love this. the president and the new ads that come out, both sides are going to have a billion dollars and it's going to get really nasty but to be able to run the ad and start it the same day that you're at a fund-raiser of tony james, the president of a private equity firm. you're putting out the ad that same day and you're at a $35,800 a head dinner at a private equity firm. so you're able to take the money from the private equity firm but at the same time have ads disparaging all private equity people because of bain capital. we should write it off to politics as usual, right? >> i think we have to. i think the fact of the matter is that private equity in general and bain capital in particular has made very constructive contributions to the economy. >> no according to that ad. they say they subjected the life right out of that company.
>> i think we had this debate during the republican primaries. i think mitt romney set the record straight, that buy biand large bain capital was -- >> but those are your examples. >> bright horizons, 20,000 employees, you had linda mason, roger brown, yale classmates who founded this business, they'll tell you they never could have gotten going without mitt romney. >> we're going to talk more about these so-called real romney later on in the show but in the early days of bain, what was he like? >> i think we'll wait for jeff to get on. he's just a really regular guy who can make fun of himself, had no false pretenses and was really, really cheap. >> i like the fact that he's really cheap. can i say that? >> he is really cheap. >> you like that? >> i think that's a fantastic
quality in a president. >> why is that a fantastic quality? maybe not as a human but as a president. >> as a guy who has made a lot of money. there's something redeemable about that. >> the reason the staples idea resonated with him is because he was cheap enough to want to save on pencils and paper where most others didn't care. >> a guy that's got the finances of the country, that's why -- >> i like that. >> a lot more to come. >> he limited the free cookies because he wanted the symbol of value to be there. >> a lot more to come from tom stemberg. >> if you have any questions about anything you see or hear here on squawk, you can e-mail
we have from the cme group kevin ferry. good to see you again, sir. when i came in to work this morning about three hours ago, it was still very much risk off in asia and europe. the futures are really turning around now moving to the up side. we were trying to work out whether or not it was better than expected growth in germany or something else? >> i'm going to say it's more about function of some really extreme levels hit in the section last night, mandy. and also just that the market seems to only be functioning in panic mode. so as soon as there's any die down in the information, the market tries to stabilize. i think you have to watch the high last night in the bond market carefully as a turning point add the s&p we thought would trade 1331 in the future and it stopped a little short at like 32 1/4. so maybe not out of the wood yet but i don't necessarily think the market's gyrations are the
best reverse engineer of an explanation is the way i would say it. expect more today. >> expect more today. what would you do in that environment? kevin? >> we're no fan of the panic. i think that freaking out is not necessarily the option just because there's uncertainty about what's going on in the eurozone. so a little calmer we think would be better. but funding markets that we look at that have been stressed are a little bit easier today. the levels are still elevated but the stress is not getting worse. i think i'd watch for those metrics to come off a little bit. that would be a sign that the market has found its footing again. >> we were talking earlier on the fact that we saw 11 for 11 update for the u.s. dollar. today i think would be a record 12th straight day winning streak. what's your call on the u.s. dal lar.
how how much longer can it do that and is it going to hold the socket back? >> i think really what you see is the competitive devaluation of the currencies is on and right now it's orderly. so the irony of the dollar improving is that real shields have returned to sharply negative near the all-time loaves while that's going on. so i would say that it better for europe that they've been age to get their currency down a little bit in this environment. as far as bad central banking is going, they should cut the rate. it's ridiculous. they're making fundamentally incorrect decisions at the ewb right now. >> thank you so much for that, kevin ferry. >> coming up, brain capital talks mitt romney and tech investing and a blockbuster one
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welcome back. coca-cola giving mid-calorie sodas a second shot. mid calorie sprite and fanta will be tested four markets. the drinks will contain half the calories of mid-calorie sprite and fanta. >> game one of the eastern conference finals the game was scoreless until 53 seconds into the third period. the rangers went on to win 3-0. the l.a. convention lead the series over the phoenix coyotes. joe, you going to be watching that tonight? >> no. >> i think mandy is. >> i'm lining up for that one. i'm sitting on the edge of my
seat, i've got my jersey, got my pom-poms. >> it's nbc. you're excited. >> i'm legitimately excited. >> groupon making waves thanks to venture capitalists. jeff, welcome. it's good to see you. you were president and ceo of nq, which was then sold to bain and you then led the investment to linked in. do i have that right? >> not quite. i was co-founder of nq, which bain capital investments was a partner in and it was then sold. >> then you were intrumtal in the venture of linked in.
>> that's correct. >> facebook, you figure it's worth the type. >> i would not bet against it. you think about what they've achieved and the market they operate in, i think it has a lot going for it. i think the time spent for consumers is continuing to grob from 30 to 40 and at some poi point -- and facebook, the stat that is staggering to me is 20% of all interfet usage son facebook. these guys have lots of engagement, lots of users and i think the dollars will continue come. for example, it doesn't translate very well over to
mobile platforms and i believe this is an area it has to get into to stay ahead of the pack. do you have any faith they'll be able to do that? >> i do. clearly we've seen an increasing blur between internet and fonl and a all comes together in immediate why need meadia. if you're a glass half empty person you say they've yet to figure out mobile. but up see a massive engagement in mobile. anybody who has the useful andin gaugement that they have on mobile. i'm a form are mobile entrepreneur. i think mobile is even more exciting than the things you can do online. it has the benefit offing is with you all the time, it's
always wear and frankly, you can reach somebody where they've most likely expanded, which is outside of the home. i think mobile is a massive opportunity for facebook and lots of companies. >> where is this going to trade to? >> so i'm not a public equity analyst but i think you can absolutely expect this is going to trade up. i think it would be out of my jurisdiction to give you a price but from the folks that, you know, that i sort of see and talk to and folks covers the space, clearly there's a lot more interest in showning a share net boork? do you see this as a good long-term investment or is it a short timer for you? >> i invested earlier stage, private companies. i has to to be a long.
term play. if you're someone who is a long-term investors who really understands the defense ability of the -- who understands the engagement. >> like you say, you're glass half full. >> thank you, jeff. >> good to see you guys. >> jpmorgan shareholders are getting ready for today's big meeting in florida and then trump tuesday. stay with us. where's it going ? ♪ that's why right here, in australia, chevron is building one of the biggest natural gas projects in the world. enough power for a city the size of singapore for 50 years. what's it going to do to the planet? natural gas is the cleanest conventional fuel there is. we've got to be smart about this. it's a smart way to go. ♪
and people. and the planes can seem the same so, it comes down to the people. because, bad weather the price of oil those are every airlines reality. and solutions won't come from 500 tons of metal and a paint job. they'll come from people. delta people. who made us one of the biggest airlines in the world. and then decided that wasn't enough.
expect to complete the sale. and gasoline has drown 3.6 cents. and yahoo! chairman fred amoroso wants interim ceo to shed that interim tag. >> just days after jpmorgan's $2 billion mistake, jamie dimon is facing shareholders again. joining us on the squawk newsline, donald trump, chairman and president of the trump organization. donald, i haven't seen your comments on jpmorgan yet. if it was a bank with $10 billion in assets and they lost 2, i'd be pretty concerned. banks are in the business of risk, aren't they? sometimes they lose money. >> they are and sometimes you make deals that don't work out
so well. even the smartest people on your show, every once in a while they make a bad deal. jamie is a good guy, he's a banker and he'll recover but it's been a tough week for him certainly. >> a lot of different things came together all at the same time. they're voting on volcker the same day it comes out. jamie dimon, a democrat who left -- didn't leave the fold completely but has been probably the most outspoken opponent to a lot of the regulations but also known as the best in the business. it's ironic in all came together and happened this way. unfortunately, it played right into the hands of the dem logs to maybe go too far. >> and right into the hands of many of jamie's enemies. he has plenty of enemies within the banking industry. they haven't liebtd him overs years as you know very well. he has been vokal and he's down an outstanding job and now that
he's got this glitch and i guess $2 billion is more than a glitch. but he's got this problem rng they are really going at him. there's no question about it. it's called life. >> in the background of all of this is that things are still too big to fail and we could still hurt the common man if a bank gets in trouble. if it's not $2 billion, what if it's a smaller institution and it's $10 billion. here we are thinking there's this taxpayer put on all of these things. >> our geniuses in government, the ones who haven't had a budget in tleer three years are all talk about something like this shouldn't happen. mean while we have $16 trillion in debt. those are the problems. whether it's bangings or businesses, you make mistakes. i can take the smartest person you've had on your show in the last five years and i'll say
there's been plenty of mistakes made. every one of your great deal makers, including me, makes mistakes. you have to live from your mess takes. i've seen make big, big mistakes where it brings down your company and this isn't one of those. $2 billion is a lot of money regardless of j.w. horse. >> skram a dime on said the trades were safe last month. do you think at the meeting hart kls accent -- i think slated to take home 23d million. i'via drew -- >> from what i hear, it's going to be a rough and nasty meeting.
a lot of the people that don't like jamie, they now have their shot. i read where a certain group wants to take away his chairmanship. it's going to be a rough meeting for jamie. no question about if. he's not used to this. he will survive. he's good at what he does. heap does a great job. the one thing is you can't hp zens. >> would would it make it safer? >> i don't think so. jamie learned a mistake. it's going to -- i watched him on "meet the press the other day." jamie's got a right to be
critic. now he has to sit back and take stock. a very different position for him. >> trying to figure out with this ren investigation thing should firms be able to hedge their risk like this? where do we stand? >> prehave regulation, probably more than any country in the world and it doesn't stop this. four years ago there was plenty of legislation out there also. but they've added to it and they've added to it in spades and you still have this. now they're talking about making even more legislation. all that's going to do is stop people from making loans. i was saying yesterday to somebody, if you have lots of money the banks will give you any amount you need, at a 3%
rate, a 2.5% rate. in order, if you don't need a loan, this is to those poor guys can't get money no what what they do. >> the more regulation you have, those who need the loans are not getting the loans. >> this was a speculative bet. it was couched as a henning that went completely and utterly wrong and i think we agree ultimately turned into a proprietary loan of some sort. and i think the question on the table around whether -- >> it would cause more regulation, which causes -- >> the the bank are brutal on companies like an idea, you
wausaw thank you and sometimes it wouldn't work and sometimes it would. today i think a startup is virtually impossible. i don't think banks loan up ultimately built this company. >> when i started staples, i had to convince a bink. >> first of all, i love staples. so i really congratulate it, you'd never had a stay les concept today, they'd laugh at you, if you said because we wants to sell staylers and pencils, expensively, you have zero chance of getting a loan. >> so you don't think we need any more bank regular lease --
>> well being some people say we have too much. and a lot of banks would get around the rules anyway. but here's the question, donald. a lot of people think the decks are stacked for the house. the little guy is not on a level playing field. they see things like jpmorgan and it racketifies that. >> i think it's sacked against not the little guy, it stack to be -- i mean, i've had periods where it was great to go -- i can borrow any amount of money and i don't need it. they're calling me all the time, would you like money, do you want money? if i needed it, they wouldn't be there. >> regulation by definite is not going to prevent things.
they should be -- >> i think we're arguing at the wrong thing. >> hold on. why don't we do a commercial bank, make it a kwazy utility and let the investment works be smaller opinionthey want to special laet then go. if they fail, they feel. it's all not systemic enough to where it wouldn't matter. >> the gangs are petrified the develop lagsors. >> what fdic and depositors and commercial beans being like they used to be quasi utility. where thanks do you want. >> u been to have sood strong
banks. >> you can't bring down the system. you can't let 10% of the financial system has been and wall street's been blamed for the unemployment, donald. you can't let main street suffer from wall street. >> all right. well, you know what's going to happen. if it starts going down, the governor is going to come back in again. now, can i just speak about something? i've been watching your show answered always watch your show, i love your show. the day i like best of course is trump tuesday. >> you tape this and watch it on a loop. >> here's my question. i was hearing about facebook and i'm thinking about do i put money into air force base? who knows. but mark zuckerberg is going to be worth $18, $19 billion. you tell me he's got a gill frernd. does he marry the girl friend? if he does, get he get tree krpt.
>> you've been talking about the banks let's go-for-ak. they say for the the nks couple of years she sues him for $10 billion. in fork she would get a big change of what he has. so i'm just curious has to who is doing prenuptial and when. >> in terms of being equitable to her in the clean-up, how much do you want to offer up innin advance? >> i'm notoriously cheap with these things. i think if she made $1 million, that would be good. honestly, i have a certain friend that you all know very, very well and he's been married and divorced a lot. every time heap gets divorced,
he i can't use this ma'am i don't. >> for 830 million, they always hays ended. >> he's companying them happy. >> guatemala while facebook has been growing. you might be able to account for a -- >> without her and her brilliant decision making. she advised him and made dinner for him. she's entitled to at least $10 million. >> and what should he spend on the engageme menment ring? >> that's irrelevant. >> why would you get married at 28? >> a lot of people like getting
married. >> why? if you want to have kids, i would see know rush whatsoever that this plan passes. it's a great william. >> 28 people like to get married or 80. what were you before then being like a blab or just hanging out. >> waiting -- >> d if that's not her name then -- >> i'm disappointed in joe that you're so into the beauty of a woman. >> is this what you'd call off the rails again, andrew? >> this is the kind of
conversation we need to be having. >> i love the way in "squawk box" they leave a certain amount of minutes for off the rails. >> you can only talk about bank regulation so much. >> right. after about ten minutes of bank regulation, we did have to get into his preyuptial girl. think i you should write some sort of story on the pre-nup. that can be peks week's column and pac about the possibility of a poefs up in. >> when you're married and say by the way, let's forget it. it's called pre-nup or nothing. >> we have about a minute left. we're going to talk to stemberg about walmart. stenberg put it in context for me here. he goes every single business that is operated down in mexico, if you want to operate there. >> walmart to mexico, it was the
sister company of one of my companies jewel in chicago. when jewel took a minority interest in them, they were very up front and said, look, we have to pay to get sites. there was no disputing it. >> everybody else was bain. >> we have to do it. >> this is how business is done. >> then why the hoopla? >> because in my opinion -- >> mexico's a mess and think country is absolutely prasz praise. they chance people from going over to china, mexico and getting business and creating jobs in in country because we do make some product that goes out but i see them seem mess co or let chinese or let the chor honest p a we're like t--
>> do you really want to -- >> do you think it becomes a slippery slope? >> no, it's it there already. you then hire fancy lawyers. >> isn't that the problem, you try to get around it rather than live by the law sp. >> you can't. >> you'll do business nowhere. and to think that we prosecute these people -- by the way, china would have a great gripe and mexico and lots of other countries would have a great gripe. to think we prosecute these people for bringing business is just -- andrew, the sad part, everything other country in the world is doing it.
we're not allowed to. it them at a huge disadvantage. let them clean up the act. we shouldn't be doing it for them. >> as jobs come and the moral high ground come, i think that's part of leading -- maybe it's policing or leading the world in terms of -- isn't that what this is ail about? >> andrew, rear not ledding the world. the world is laughing at us. >> on this subject , it's like they criticize obama for taking pac money. you don't take the pac money, you don't get elected and then you don't do the things you wanted to do. if you take the moral high ground and don't take the money, what do you do? >> and then it's like every for
look at that. i said how do you pay over there and he said we don't pay there. >> and then they get prosecuted in the united states. there is one answer. go to your room, close the door and go to sleep, don't do any deals. the only way you're going to do it is the other way. you know what, it's fine for india to prosecute but for this country to prosecute because something took place in india is outrageous. >> donald, all right. good. this is, you know, this is kugt edge, andrew. i was kind of a lone voice before -- >> donald has now joined us and tom has joined you. i still have mixed feelings about this. >> you're a goody, what do they call it, goody two shoes? >> more on the fallout of the jpmorgan $2 billion trading loss. remember jim stewart?
>> yup. >> oh, my god. so goody two shoes. >> and then the internet sales tax. former congressman bill delahunt, author of the main street fairness act. that is in the next hour. stay with pus. >> up next on "squawk box," don't start your day without knowing the names that will make you money. joe has your list of stocks to watch right after the break.
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take a look at some stocks. i don't know what this is. who? >> dick sporting goods earned 7 cents above estimates. i used to pick the songs, andrew, in the good old day. now havei have to -- >> this is some hair metal loser. what's his name? >> is it a comment on your thinking skills? >> no, i didn't pick this. >> i didn't even know -- >> what are you listening to these days? >> i had a request today. i would have played santigold.
>> by the way, i've become quite the american patron. i'm listening to country western. it only took two years. >> and groupon we've been talking about, first quarter profit of 2 cents a share was above the estimate of a penny. revenue of $559 million was above expectations. >> look at it go premarket. >> and an upbeat forecast also. >> coming up next, roger lowenstein on jpmorgan's executive moves. and then the mitt romney the world doesn't know. meet the man who worked side by side with the gop front-runner. get the real story of what he was like at bain capital. >> if you're just tuning in, you're two hours too late. >> we're looking at a first quarter number of 68 cents a share. the estimate 65 cents.
i've got a full-year forecast for 2012 of $2.90. >> and i just think a lot of people expected a bigger up side in the quarter and for the full-year guidance. >> we got a fight going on here. >> this is tv, live tv. boys, take it out the back by the wheelie bins. >> think of every word that becomes a verb in the american vocabulary, to xerox, to fedex, to google, to facebook. you've wanted to own those stocks during those growth phase. i don't think this one is any exception. >> whether you're in business, whether it's banking or any other business, you make mistakes. i can take the smartest person you've had on your show and most successful person in the last five years and i'll find many mistakes they've made on the way up or in many cases on the way down.
on a day to day basis, i am not using gas. my round trip is approximately 40 miles to work. head on home, stop at the grocery store, whatever else that i need to do -- still don't have to use gas. i'm never at the gas station unless i want some coffee. it's the best thing ever. as a matter of fact, i'm taking my savings so that i can go to hawaii. ♪ how math and science kind of makes the world work. in high school, i had a physics teacher by the name of mr. davies. he made physics more than theoretical, he made it real for me. we built a guitar, we did things with electronics and mother boards. that's where the interest in engineering came from. so now, as an engineer, i have a career that speaks to that passion. thank you, mr. davies.
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the obama campaign out with a new ad that characterizes mitt romney as a corporate raider. >> bain capital walked away with a lot of money they made off this plan. we view mitt romney as a job destroyer. >> jeffrey sees mitt romney differently. he worked with romney at bain. >> the third hour of "squawk box" starts right now. ♪ can i say this house is falling apart ♪ >> walk the moon, that's what this is. >> this is your request? >> no, i did not request it but i approve of it. that's a cincinnati band. >> welcome back to "squawk box" here on cnbc, first in business
worldwide. >> becky quick is off today. our guest host, tom stemberg. europe is rebounding. explain that to he. the more i read today, the more worried i got about the fire wall. that's what i'm thinking of. that's what people are deciding, if there is a disorderly exit by greece from the euro. >> it feels more and more likely in terms of sentiment. where it would really come to that is another thing, right? >> even the guy that talks tough, seems to want to work within the framework of the agreement already just a renegotiated with less austerity but stay in the euro, right? is that how you see it? >> i'm still thinking about mark zuckerberg's pre-nup and whether they should be bribing people.
this is the news. >> you're married. >> i got two beautiful twins. >> a wife did come along with it. >> now we will get to the news. >> don't up get credit for getting him married? >> i do take credit. >> what else do you take credit for? >> most of his life. >> global warming. >> home depot earned 65 cents a quarter. sales were a bit short of expectations, though. the company did raise full-year earnings forecast. in other headlines this morning, facebook confirming in an s.e.c. filing that it is raising the price range of that upcoming ipo from $34 to $38 per share. the range values the company between $92 billion and 103 billion. facebook also slightly more cautious about its acquisition of photo sharing service instagram but says it still
expects to complete the deal sometime this year. congratulations to you, mr. stemberg, who has got some pre-ipo shares. this is a big one in m&a land, coty withdrawing its takeover bid for avon. avon missed the deadline to start discussing the deal first proposed in march. avon is saying they didn't miss the deadline, that they thought they had a little bit more time, that they were going to review it. >> what happens now? >> i think coty is gone. when you have warren buffett behind your deal, it's not going to be a hostile deal. they're either going to come, they're going to do it or they're going to walk away. i take them at their word when they walk away. at we said in the 6:00 hour, this could feel like a yahoo! moment potentially for avon if they don't get their act together. >> is there anybody else who could make a bid for avon?
>> others could. if they didn't want to take a deal from coty, i'm not sure why they'd take a deal from somebody else. >> think about the real walk aways, groupon. $6 million. >> you're talking about investors. >> google. >> well, they had an offer from $6 billion from google and turned it down. i think if you're a betting man, you'd say this is going down to a $1 billion valuation or less. >> wow, that's your call. what's groupon market capital right now given the earnings? >> i don't know. what i do know is a lot of my companies use groupon. when we started out the split was 50/50. today even for small retailers the split is 80/20, 80 to the retailers and 20 to groupon or a competitor. the results were groupon, rulala, living social. you almost have the cost of
acquiring a new customer. there's no differential -- >> mind up at $17 it's still 3 bucks below the ipo price. >> if i could buy the stock i'd be short again. >> market price $17 billion. you got a shot on this thing? >> i can't buy the stock or i would. >> we should talk about that a little bit. >> let's talk about groupon. >> how much did ron perlman pay patricia duff? ellen barkin. i was trying to figure out who he was talking about. >> let's not out him. >> let's not? i already said it. >> investor expected to grill jpmorgan over $2 billion in losses. we find mary thompson down to
florida for the shareholder meeting. nice. >> that's right. it's a little humid down here, joe. a little humid in florida. already a very heavy media presence here at the annual meeting where dimon's role as ceo will be in focus, facing shareholders just six days after the company disclosed a trading loss that could grow to more than $3.25 billion. they've done what could prove to be more lasting damage to the bank and dimon's reputation. dimon because of his hands-on style and history of focusing on expense and risk control. the bank because of its performance during the financial crisis with an $18 billion market cap hit it's taken since last thursday. among proposals voted on today, executive pay. dimon earned $23 million while
ina drew earned $15.5 million. the former head of the unit responsible for the trading market. they'll ask to separate the ceos and chairman, both endorsed by iss and glass lewis, proxy holders. they say dimon's role as chairman remains safe. the meeting starts at 10:30 this morning, guys. i'll bring you all the breaking news later today. >> great, mary. thanks. for more on the jpmorgan fallout, let's talk to roger lowenstein, known for covering financial drama on wall street, also the author of the book "the end wall street" and "when genius failed," how appropriate, roger. >> and he wrote a big cover story about jamie dimon. "america's least hated banker" it's called? >> let's say this was some kind
of commercial or industrial loan. it's bad to lose $2 billion -- >> but it's not a crime. >> we wouldn't be talking about it, would we? >> let's break it down what happened. everyone is referring to it as one trade, one deal. from what's reported i think there were two parts. they had exposure to europe and they were nervous about it so they bought credit default swaps, buying insurance. that's legal under the volcker rule going forward when it's implemented. at some point they decided europe's not a risk anymore, we don't want all this protection. so they went out and sold credit default swaps. at that point they're gambling. if you splice the trade in two, why would you want deposit insured banks selling insurance on debacles, which is what happened to aig. >> there are likely other firms making transactions similar to this? >> i don't know.
the credit default swaps, that's where it happened. >> do we want banks to be able to hedge their, quote, macro risk? i understand on a market making basis on a individually hedged trade, that makes sense. but does it leave so many loopholes you could do anything you want? >> i would rather not have a credit default swaps. when banks say do i make this loan? i can't just flip out of it in credit default swap. they had to like to you make the loan. now it's like i don't like it, i swap it out to somebody else. >> it's when they try to hedge the hedge. >> what's a hedge of a hedge? it's gambling. if you want exposure to europe, find some company in europe and
lend them money but i wouldn't have jpmorgan or other deposit banks doing default swaps. >> would it hurt us competitively to have deposit banks the way they used to be -- >> you guys were talking about this is walmart. walmart is the biggest retailer in mexico. do you think if they weren't paying $3,000 bribes to local plumbing inspector in guadalajara, do you think they'd be the largest -- >> no, they wouldn't. it took years and years -- >> i don't believe it. people want their product. they would have gotten there. >> but they're competing the tire wa entire way. >> you're surprised? >> this is good. what am i a cliche liberal or something? >> you've been on before. >> you're the guy talking about carl levin, a democrat or
something? >> go to new york. try to get a permit in new york. >> who do you bribe? >> you need an expediter. >> you need an architectural expediter. >> we asked the landlord how long would it take with an expediter? two weeks. without one? a year and a half. >> i don't want to raise the bottom where we insure our financial firms don't have to adhere to standards any higher than those in china. >> leaving aside the whole philosophical debate of whether theror not we need more regulat or not, do you think there's going to be a significant cha change? regulation? >> that's jamie dimon's point. >> they should be able to play whatever they want to but keep
the deposit banks quasi utilities and separate out the investment and let them fail. >> i agree. i agree. >> then that's what we need to do. >> we did let one fail. >> right. we had a guy named glass on earlier. i was going to ask him to finance the next bill. if we can find a stegall,we can make it work. >> let's back up. how about your favorite bill sarbanes-oxley. you remember enron, mci, rite-aid, lucent. how many big corporate accounting scandals have there been since sarbanes-oxley? can you name two? can you name two? >> there are people who don't like -- >> they don't like it but we haven't had the scandal. >> we don't know what the counterfactual is on -- we're growing at 2% a year now.
>> we never know the counterfactual. >> there are a lot of smaller companies that try to adhere to -- >> google could go public -- oh, it did go public. >> you don't think -- was that your point to me, i called him a demagogue? >> i'm responding to your characterization of me that we know what he's going to say. >> how did the carl levin is a demagogue -- >> i think the securities and, change act worked. >> do you think dodd-frank solid sao big to sale? >> roger, here's what i worry about. we have resolution authority and we say resolution authority or jamie and others say it solves the problem. my worry is even though we the law on the books, there's going
to be so much pressure that it won't work that we bail them out anyway. >> that moment will look different from the lehman moment, that will look different from the black monday. every debacle looks different. when the moment comes, people freak and they don't want to risk it so they'll bail it out. >> okay. >> very good way end to this conversation. >> it was exactly $80 million to patricia duff. everybody that trump was talking to knew who he was talking about. i'm not outing him but our viewers should know. it was a pre-nup and it was $80 million and he was talking about his friend ron perlman. and i don't know what ellen barkin got. >> we don't even know when zuck is getting engaged. >> we're jumping the gun. >> ellen barkin was next. >> if zuck was listening to his
conversation, you can bet your bottom dollar he's not going to propose now. >> that and he's not coming on the show any time soon. >> coming up, the unfair advantage for online retailers that's also robbing the cities and states of needed revenues. >> still ahead, he worked with mitt romney at bain capital when the company funded an office supply chain called staples. at 8:48 eastern, jeffrey rennard will tell us about the mitt romney the world doesn't know. keep watching "squawk box."
. welcome back to "squawk." it's a controversy that's raged on for years. online retailers don't have to pay tax for customers that live out of state. thank you for being here. this is an issue that has been on the mind of becky quick who wrote a very interesting column in "fortune" magazine about the amazon tax, about the idea
thatlithat online retailers are not paying the tax. in new york, they do take the tax. >> only collected in five out of the 50 states. >> what happens, of course, is that it disadvantages the hometown book store. look what happened to borders, you know. >> the question i have is do you think that -- i'm not -- i'm probably with you in the end but i'm curious -- >> as long as you're there in the end. >> you think ultimately businesses like borders and others would have thrived, would have had a shot if the tax -- what do you think the distinction is? >> let me cull you this a little bit. i'm the board of guitar business. our business was up in oregon. we moved the business to california, had to begin collecting sales tax. sales went down by roughly 20% in that state as a result.
>> really? >> on a big ticket item. it has huge impact particularly on big ticket items. >> it's really -- the ones that are really punished are the small mom and pop store, as you said, the book store. how can you compete with an amazon if you're from massachusetts and you have a 5.5% margin that you have to -- >> in new york it's closer to 10. >> 10%. >> the states and municipalities are missing out on uncollected revenue as well. in becky's column, she was saying about $25 billion a year goes in uncollected tax revenue. >> that's the 2012 estimates. by the time 2016 comes around, it will be in the neighborhood of $40 billion. >> because we're exploding in terms of online shopping. >> exactly. e-commerce is growing. >> as a federalist, i believe
before we impose new taxes, we close the loopholes and collect the money that's owed. >> we don't have a devils advocate on the set. so i'm just going to play it. what do we make of the idea we would slow down online commercial? >> amazon used all kind of arguments to fight this. they started with it would slow down commerce. then they said it was too complicated to collect. amazon has finally come around and said we're sick of fighting this thing. we're going to have a competitive advantage over ebay if we get this law passed so they're in favor of a law passing. >> they support the bill that i filed now. >> handicap it. where are we in terms of something really moving here? >> my sources tell me that post the election there's a real chance -- >> nothing happens preelection. >> no, nothing happens
preelection. >> where's mitt romney on this issue? >> i don't know. as a federalist, i'd hope he would be in favor. george bush as a former governor was strongly in favor of it. i do think they will make the bill so it's truly simple. bill's bill simplified the taxes. the decision said it was too onerous to figure this out. now they created 15 uniform classes of goods, you know if baseball is a good or sundry, one tax rate per zip code, one check to the state. it truly made it simpler and thus constitutionally viable to pass -- >> on a related topic, i want to ask you with relation to staples, does it have the best buyer problem of essentially being a showroom for amazon? people go in and look around and say i want that and i want that
and i want that and go back to amazon and buy it online? >> if you don't owe the tax -- if you live in california, you own the 10% sales tax, nobody pays it so you've a$200. that's patently unfair to staples. >> what's happening is exactly the staples that you just outlined. people will go to the store, look around. >> we all do it. it's horrible to say. >> of course. >> congressman, thank you for being here. we have to keep an eye on online retail stocks. if this goes through, it may change the game for investors playing at home. >> coming up, break being economic data at 8:30, retail sales, and instant market reaction. and the mitt romney you don't know. we're going to talk to jeffrey renart. he was with romney at bain in
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we are just seconds away from retail sales and cpi numbers. we've got rick santelli standing by at the cme in chicago and mr. liesman, the professor, is in studio. you're there. we've got 4 seconds to go. rick, the numbers, please, sir. >> and the survey says let's start out with retail sales, up .01. if you strip out autos. if we look at cpi, it was goose egg, unchanged month over month. year over year numbers, on headline up 2.3, core up 2.3. very unusual. if you look at just the headline number, that's actually as expected but lower than last look at 2.7 whereas the core is hanging tough, unchanged at 2.3. empire manufacturing index,
17.09. this number bounced back. it's very volatile. our last read remains unchanged. the market is splitting the difference. this is definitely better than we anticipated. we're up 70 in the dow, up 47. it's worth some points, yields have moved up a basis points but still remain in the ten year lowest yield since october and in the 30-year-old lowest yield since january, euro versus dollar, lowest since january. back to you. >> mr. liesman making some noise on the set here. >> interesting. motor vehicles did okay. we had the big decline in building parts, which is what we thought was going to happen. this is more weather payback. we had the runupbuilding materials as housing spiked with the warmer weather. gas sales, we were looking like
a 1% decline. that may be coming. if you put the two together. ul actually get real retail sales -- the thing that guys are looking for which takes out building materials. i think it keeps us on track for the rest of the quarter. what's happening with the rest of the quarter, what's happening with government spending? >> on the consumer side, we had the consumer sentiment numbers at a four-year high. how will that translate into actual spending? >> it doesn't translate directly but it's like a roadblock. remember 2001 and 9/11, they did consumer surveys? they were in the dumps but
everybody went to buy cars. if consumer sentiment is in the dumps, you think people would not spend. it's watching wages, watching jobs and getting the savings rate up. >> what are wages up to? >> can i just challenge joe a little bit on this? >> about. >> our guest! >> how is america exceptional if we go around the world paying bribes? >> why do we need to clean up the world's problem? >> we don't. we don't. i look at it from two standpoints. >> what does walking around in -- how would you do business in india or mexico? >> i lived overseas, of watch in rusch the europeans laugh at americans who wouldn't pay bribes. what happened? the europeans followed us. we led the world in that regard. two reasons, joe. first of all, it's for foreign
policy -- >> but it's even a language issue. a bribe in one -- here is one thing, in mexico it's the cost of doing business. >> i agree. but there's another reason. >> in india it's not even called a bribe, is it? >> the rich estimatier that we are still, are we the maker of the bribe or taker of the bribe? who is setting that price in is it us or the local economy. >> reporter: tom, maybe you lead by that. >> and, yes, it costs us. >> if you don't work for the -- you can't -- it's like when i talked about super pac money. >> the end justifies the means here. >> when the president said no super pacs, once the
republicans -- once there's going to be super pac money, is it going to help if you are not elected by standing on your principles? >> some would say yes. >> it's a perfect world then. >> america is exceptional because we do good, not because we did good. >> no, i don't -- i think doing good we have different views of doing good. i think being able to go into mexico and build all these wall marts and employ all these people. >> but if we get there, what's the reputation of america? >> the reputation isn't hurt by dealing with mexicans the way they do business. >> i don't think anyone in mexico thinks any less of them because they did a bribe. >> look, it wouldn't be against the law, this corrupt -- if the was somehow made to be more -- >> i very seldom find myself in
any walmart. >> you got a problem. let's bring rick in. i'm curious. where are you on in, rick? are you hearing this conversation? >> i am. i have no idea how we arrived at this so i'm not going to bring the way-in. >> and do we think less of walmart because they paid the bribe or cover up at the highest levels. >> the the payoff! you look at what goes on with regard to politicians and what they do. i mean, it's truly reprehensible. >> i agree, rick. i think we all degree agree. it's disgusting. >> you go to all these different spots when you want voters, you try to guarantee this group's loan and that it has a put a
union to the. >> do you remember the rights that the obama administration go those -- do you remember the water rights that were negotiated through some of the congressmen? how about the -- who is the other guy that -- he had to resign. >> nelson. >> yeah, nelson. the nelson -- >> corn husker. >> a whole different carve out for nebraska you -- >> what's your point? >> we live in the real world -- >> what about california, illinois? skt that the exact same dynamic at walmart? you're basically taking all these taxes of people to pay old benefits? it's terrible! >> you are the last person for me to think who lives in a relatively value, relatively moral world. that's what you're talking about. >> how about i made the point. say you go over and bill gates
gave you $1 billion in vaccines to every kid in theory kri. >> that's a hugish you, by the way, is that happens. >> so in your view action nating the children -- >> now you're deciding -- >> no. look at the late many retails, different parts of business. in germany, he frans the whoot guy, finished. italy is a problem. do you pay or not pay? if don't pay, nothing happens. if you do pay, nearly 10% go to
jail. if you get somebody who doesn't have to pay because -- >> in the 70s, they found 400 u.s. companies were going around the world to lower -- the public said you know what, these are not companies we want to be dom sieled in our country. that's a decision, that's a societal decision for which i don't disagree. we pay a price. >> if we don't pay a price it's because it goes done anyway. we really don't want to know what is actually going to let us win in those places. you know, it's almost like -- would you like to be married to someone who said if you want to go cheat on me, fine, just don't let me no about it? is that a better way? >> i don't like that. >> but the argument is it shouldn't be either way around. >> you're saying lift it, joe.
>> yes. and i'm saying there's so many things that would make a world perfect -- >> and then the reports are for it or companies are pay bribes around the world. >> stevie, thank you for putting that part in about the pigeons. >> i was limb etting previously. >> and coming up, when mitt romney made an investment in the one and only staples. ♪ i just haven't met you yet to get the things you want from a bank. like no-fee atms -- all over the world. free checkwriting and mobile deposits. now, depositing a check is as easy as taking a picture. free online bill payments. a highly acclaimed credit card with 2% cash back into your fidelity account. open a fidelity cash management account today and discover another reason serious investors are choosing fidelity.
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>> our next guest joined bain capital in 1984 when mitt romney's vision focused on making business better. here now to share his experiences with the gop presidential nominee, jeffrey renner. welcome. it's great to see you, jeff. >> jeff, what were you guys doing there? the picture is a bunch of rich guys with money sticking out of their ears. what was the background of that picture? >> first of all, nobody was rich at the time. i had $30,000 in student loans. i just graduated from graduate school. it was a playful shot. it was kind of like guys holding their first paycheck and celebrating. we had just raised our first
fund. we were posing for our first brochure and we decided to do a playful cameo shot, the person dream. wa would happen in it thing worked out and we wound up being successful. >> in '84, there weren't a lot of females in that picture. how was mitt in terms of promoting women, hiring women, that sort of thing. >> first of all, the seven people in the picture were the people bill gain gathered to start bain capital. mitt was actually at bain & company head of recruiting. he hired a lot of women at a time when companies weren't known for hiring women.
you have to remember in the early 1980s the first wave of women coming out of business schools was really starting to hit the market. bain & company was probably the largest recruiter of women. mitt was head of recruiting for bain & company and at bain capital our first chief financial officer was hired a year after that photo was taken. michelle may was a woman. we invested in a lot of businesses led by women, bright horizon was funded around the time we funded staples, headed by mason. judy george at domain, we funded around the samity we funded staples. >> i think that there's a lot of disenfranchised democrats out there, disenfranchised with obama who are looking at romney saying can i support him or not? and they're looking and saying if he's the moderate massachusetts governor that he
was before, maybe they can get behind him. but that they're anxious or nervous that he as part of his campaign has turned right to appease the base and may not be able to turn back to being more moderate. up know him. where do you think he really stands? >> i worked very close with mitt for two years, one of the two associates of '84. i left of a mitt left bain capital in 1989. i know mitt, i support him. the mitt i know is a moderate guy who is very inclusive. he liked diversity at bain capital. we had people of, you know, gender, faith, race, a broad mix. he liked the debate and the interplay among them. you know, i -- >> is he cheap? we were laughing earlier on
about him being cheap and whether or not that would actually be something that you would want maybe in a president. >> mitt is very cheap. and i am confident that's something that hasn't changed. i got in a big debate with him when i got a cell phone. i was the first one at bain capital to go out and get a cell phone in 1986 and mitt thought it was an extravagance that was a big waste of money. we had a heated debate because i was working so hard that i didn't have time to pull over to the side of the road and stick quarters in phone booths to check my voice mail and i thought this would be a productivity enhancer while i was driving to be on my cell phone. >> what are the qualities you think he has to make him a president? do you think he has what it takes? >> mitt is the most capable person i've ever known. he is incredibly energetic.
the guy does not slow down. he's brilliant. he's brilliant at both the big picture level and incredibly capable in the detail level. this is a guy who got into a very competitive business that the private equity and venture capital business, not having had any background in it, taught himself the business and then lef the business that had probably the best tracker over a 15-year period. so in terms of capability, i think it's hard to find another person who is -- >> how about the softer side? mitt is portrayed often time as this cold, calculating capitalist. is there a human side to mitt? >> what's fascinating to me is mitt is a guy who is not really about the money. he was not primarily driven by
money. this is a guy who is in a business that you have all these images of private equity guys in in the 1980s and 1990s. mitt was a guy who was at all his kids' sporting events. he has the best marriage i've probably ever seen. he and ann have a remarkable relationship and that came first. he was family first. he built bain capital. he also spent an enormous amount of time working with people in his community. this is a guy who spent, you know, all day sunday working with people in his church. and not just going to church but this is a guy who went around and helped people who had their houses burned down or had an illness in the family. >> ask him about cutting the guy's air, andrew. he was 14 years old. go ahead. you hear that and i know -- >> look, i think the guy is a very interesting guy. >> if you're going to devote the entire editorial page on
saturday to the high school antics of mitt romney, there's nothing wrong with two minutes of saying he's not the anti-christ, right? >> i am not the editor of the newspaper. >> gail collins. they ought to declare whatever it is income that's going to -- anyway. thanks, jeff. more to come from tom stemberg. >> low blow. we're going to talk it over with the "squawk on the street" team next.
let's get you straight down to the new york stock exchange. carl, melissa, jim, david, they're joining us now. guys, what do you have on the plate sf. >> what don't we have on the plate? it's facebook, home depot, there's so much news today. i don't know, we're going to have to make time to promote david's appearance on jeopardy tonight. we're going to find a way. >> yes, let's find a way. but we've had no shortness of moves the last couple of days and, in fact, again today. avon shares will be down shortly, groupon will be up shortly. >> we thought that groupon would
be bad, it was good. we thought home depot would be good, it was bad. these are role reversals that we're trying to get our arms around. >> and then there's europe, too. a little bit more of a steady tone, guys, as you know. we'll see what this gdp number means, long term, guys. >> a favor. would you let us promo this if you just came in third with $0? >> oh, jeez. >> i mean, should i bet on you to win? or at least place? >> would i have had it buried, you mean, if i just completely embarrassed myself? >> you finished negative? >> i think, you know, i don't know. it's a fair question. >> did you train for this at all? >> no, i didn't. i don't think there's anything -- >> we don't really train for -- >> as i said. >> i was saying -- >> trying to read the newspaper for the last 40 years. >> yes, you can't cram for that. butives think i but alex bothers me. he gets mad when people don't know the answers.
he ee he's got the answers right there. i'd like to see him be a contestant. >> who would be alex trebec, then? >> you've got to get your pronouncers right with the french and the accent. >> wee, wee. >> he's very good. very, very good. >> he is. he knows he's good. >> we'll see you in a few minutes. thanks, guys. >> coming up, some final thoughts from our guests. no, no it's her dad. the general's your soul mate? dude what? no, no, no. he's, he's on my back about providing for his little girl. hey don't worry. e-trade's got a totally new investing dashboard. everything is on one page, your investments, quotes, research... it's like the buffet last night. whatever helps you understand man. i'm watching you. oh yeah? well i'm watching you, watching him. [ male announcer ] try the new 360 investing dashboard at e-trade. but not how we get there.
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♪ >> all right, stock of the day, gro groupon beat the street. short come probably happening. they also control the market spending. okay, we're spending a little bit of the final time with stom stemberg. curious, the big story this week was yahoo. a lot of people were talking about it. have you fired scott thompson? >> no, the fact of the matter is he had a bachelor's degree. somebody somewhere along the way said it was computer sciences -- >> but it was him, though?
what happens if it was him? would that change your view? >> probably modestly. but the fact of the matter is, even if it's wrong, there are things that are terminal offenses. if you steal, you have inappropriate relationships -- >> he has a different way of looking at it. if the stock was doing well, if the company was doing well, would he have not gotten the boot? >> i'm not there. i don't know. but i think in general corporate america, we go to the death penalty far too quickly. if this insider was so much better for the shareholders, why didn't they put him in to begin with? >> can you trust a guy who lies about his degree sns. >> i'm not sure he lied about his degrees. >> there's a recording where he's literally being interviewed about the fact that he has a computer science degree. >> we had a recruit on street signs that was saying it was part of the recruitment